Regulatory fine lifts major overhang on Alibaba shares

A major ovehang over Alibaba Group (9988) shares has been lifted, following the record fine imposed by Chinese regulators, an investment bank says.

Alibaba shares are up by 7.89 percent at HK$235.

The e-commerce company was fined 18.23 billion yuan (US$2.8 billion) by Chinese regulators as a result of an anti-monopoly investigation.

“Despite the record fine amount, we think this should lift a major overhang on BABA and shift the market’s focus back to fundamentals,” Morgan Stanley wrote in a note on Sunday, a day after the fine was issued.

Chinese regulators opened an anti-monopoly inquiry  into Alibaba in December. The main focus was around a practice that forces merchants to list their products on one of two e-commerce platforms, rather than choosing both.

The State Administration for Market Regulation, said an  investigation found that Alibaba had hindered online retail in the mainland, affected innovation in the platform-based internet economy, hurt the lawful rights of merchants and damaged consumers' interests.-CNBC/The Standard